No Income Tax States Growing Faster, Senate Leader Says Stats Bolster Case for Texas Plan

States that do not have an income tax are growing faster than those states that do levy a tax on their citizens' income, according to statistics released by the leader of the Oklahoma State Senate.

Senator Stratton Taylor said the evidence supports the enactment of the Texas Plan - his proposal to replace Oklahoma's tax system with that of the state of Texas. Texas has no personal or corporate income tax and no sales tax on groceries.

"Not surprisingly, the statistics indicate that the income tax can be a big drag on growth. If we adopt the Texas Plan, maybe we'll be adding a congressman after the next census instead of subtracting one," said Sen. Taylor, who unveiled the Texas Plan last week.

Under the Texas Plan, Oklahoma voters would decide whether the state should adopt the Texas tax code in its entirety.

According to data gathered by the Senate staff at Taylor's request, states without an income tax were more likely to gain congressional representation in the last census than those states with an income tax. The findings include:

• Texas, Florida, Nevada, Tennessee, Washington - states without a state income tax - posted a greater rate of population growth than Oklahoma during the 1990's.
  
  
• Those states added four new congressmen in the last census while Oklahoma lost one. None of the states without an income tax lost congressional representation.
  
  
• Texas, Florida, Nevada, Tennessee and Washington also have a higher per capita personal income than Oklahoma.
  
  
• Those states also have more Forbes 400 companies than Oklahoma. For example, Texas has 34, Florida has 16, Washington has 15 - Oklahoma has only 2.
  
  
• Even without an income tax, Texas still spends more on K-12 per pupil education than Oklahoma.

"Like it or not, people and businesses tend to gravitate toward states that don't levy an income tax. It's a phenomenon that occurs in our state almost daily. Everyone knows a friend or business associate who has pulled up stakes in Oklahoma and headed south to Texas to seek a friendlier tax climate. If we don't do something to stop that exodus, we can write off any hopes of regaining the congressional seat we lost in the last census," said Sen. Taylor.

The power of not having an income tax was underscored in a March 26th USA Today article. That report profiles how Washington State's lack of an income tax has spurred growth on the Washington side of the border north of Portland, Oregon. In fact, the suburb of Vancouver, Washington grew by 200 percent in the 1990's as people from nearby Portland fled to seek tax advantages one state away.

"I think we can duplicate that kind of migration in Oklahoma. If we eliminated the income tax, people in surrounding states like Missouri and Kansas would cross the border to take advantage of our tax system. I think we would also see a lot of Texas transplants return to Oklahoma to be with the family and friends that they left behind," said Sen. Taylor.

Last week, the Senate leader asked officials at the University of Oklahoma and Oklahoma State University to help draft language that would allow the Legislature to put the Texas Plan to a vote of the people. After receiving a progress report from the schools, Sen. Taylor remained cautiously optimistic that the work could be completed in time for consideration this legislative session.

"Both universities are moving forward. I think action on the Texas Plan this legislative session is a very realistic goal," said Sen. Taylor.